Bertelsmann Launches E-commerce Group

LONDON (06/05/2000) - Bertelsmann AG has placed all of its e-commerce operations together as one business group and tapped former AOL Europe GmbH chief executive officer Andreas Schmidt as chief executive officer and president of the venture, the German publishing giant announced today.

The Bertelsmann e-Commerce Group (BeCG), co-headquartered in Hamburg, Germany and New York, is now responsible for administering the company's strategic alliances with both America Online Inc. (AOL) and Terra Lycos Inc., the company said in a press release. Schmidt began his job as CEO on June 1, a Bertelsmann spokeswoman confirmed.

BeCG is comprised of five units: e-commerce, m-commerce (mobile commerce), b-commerce (broadband commerce), a strategic alliances division and the Bertelsmann broadband group, according to the Bertelsmann spokeswoman. The company declined to disclose any financial details about the formation of the e-commerce group.

BeCG will also invest in the development and expansion of new technologies and brands under its own venture capital fund, called BeCG Ventures, Bertelsmann said.

Last month, when Terra Lycos was created by the US$12.5 billion stock-swap deal between Spanish ISP (Internet services provider) Terra Networks SA and U.S. Web portal provider Lycos Inc., Terra Lycos also entered into a broad strategic relationship with Bertelsmann. [See "Terra to Buy Lycos in US$12.5B Stock Deal," May 16.]Building on an previous Lycos-Bertelsmann joint venture in Europe, Bertelsmann agreed to a five-year advertising, placement and integration services deal with Terra Lycos valued $1 billion.

In March, Bertelsmann and AOL agreed to a four-year strategic alliance valued at $250 million, under which Bertelsmann provides AOL with media content and e-commerce for worldwide distribution over AOL's various channels. As part of the agreement, Schmidt made way for Michael Lynton, the former president of AOL International, who became acting CEO of AOL Europe. [See "Bertelsmann, AOL Agree to Partner, Future Sale," March 17.]Bertelsmann and AOL also put in place mechanisms for a possible future sale of Bertelsmann's stakes in AOL Europe and AOL Australia to AOL for between $6.75 billion to $8.25 billion. The sale would be made after January 31, 2002.

Bertelsmann, based in Gütersloh, Germany, can be reached at +49-5241-80-0 or at Terra Networks, in Madrid, can be reached via the Web at AOL Europe, in Hamburg, Germany, can be reached at +49-40-61-590, or at AOL, in Dulles, Virginia, is at +1-703-448-8700 or at Lycos, in Waltham, Massachusetts, can be reached at +1-781-370-2700 or at

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